Australian bushfire claims could top A$600m

Insurance losses from unprecedented bushfires in Australia could top A$600 million ($418 million), the Sydney Morning Herald has reported.

The Insurance Council of Australia (ICA) has said that 4,299 claims worth A$297 million have been lodged so far this fire season, and the number is set to rise.

Some 1,300 homes have been destroyed so far in NSW, Victoria, Queensland and South Australia, according to the newspaper.

ICA spokesman Campbell Fuller said many of the new claims would come from Victoria and NSW.

“Many areas are still closed and homeowners can't get to see if their homes are destroyed," he said. "For assessors to move into these areas it must first be declared that it is safe to do so."

The number of claims is likely to fall short of those for the Black Saturday fires in Victoria in 2009 when more than 2,000 houses were burned, the paper reported.

The Victorian Bushfires Royal Commission's final report on the Black Saturday fires put the total cost at over A$4.4 billion, with the biggest expense being insurance claims.

The ICA said that this season’s severe bushfires had been anticipated and many insurers had factored that into their claims forecasts. However, TS Lim, an equity analyst at Bell Potter, said that insurers would feel the strain once claims hit A$500 million.

ICA figures also show that four in five homeowners do not have enough insurance to be able to resume their normal standard of living after the fires. Many insure their homes for market prices, not taking into account the additional costs of rebuilding in fire zones – and the ICA estimates that up to 10 percent of homeowners deliberately understate the cost of rebuilding in order to keep their premiums lower.